Because of the finite supply of goods. There are only so many Ferraris to go around, or ruby rings, filet mignons, or luxury cruises. Money is just like ration coupons. People with a great desire for a Ferrari will give a lot of their ration coupons, and bidding will cause the coupon price to soar. This is inflation, too many dollars, or euros, chasing too few goods.
The tsunami of commentary on Greece and the pending EU crackup has failed to enlighten us on the critical issue of the nature of wealth. True wealth consists of all the goods and services you have - or that your nation has - that people want, at home and abroad. Greece is a mess because they produce almost nothing and import almost everything. The EU has given them welfare - free goods and services in the form of euros - for over ten years. If Greece gets booted from the EU and reverts to the drachma, they will be useful only in the bathroom.
Germany is rich because they produce a lot of goods and services that people want. If they revert to Deutschmarks, everyone will be glad to accept and hoard them.
Why are the most brilliant and educated minds - here and overseas - unable to cope with the economic monsters (the European Union, the World Bank, the Federal Reserve) they've created? Logic and science guided them every step of the way, they thought. But they ignored the laziness and base desires of people, papering over the darkness of the human mind.
For eighty years, one man, John Maynard Keynes (1883 to 1946), pretty much dictated economic philosophy worldwide, and had his way with government policy. His theories went almost unquestioned until recently, and are at the core of our rotten financial foundation.
Keynes said, "The gold standard is a barbarous relic...", and he stated that we would all be better off if all the gold in the world were sunk in the deepest part of the ocean.
In other words, money is wealth, and it need not be tangible and intrinsic. Money and wealth are whatever government authorities say they are. Dictators have always loved Keynes, because he created the illusion that he and they are alchemists who can make the worthless valuable by government order.
The ideas of John Maynard Keynes are the true soul of Liberalism, a Utopian delusion of plenty with no sacrifice.
Before Keynes, we were guided by the financial theories of Adam Smith and David Hume, 18th Century thinkers with proven wisdom.
Hume said, "Money is not, properly speaking, one of the subjects of commerce; but only the instrument which men have agreed upon to facilitate the exchange of one commodity for another. It is none of the wheels of trade: It is the oil which renders the motion of the wheels more smooth and easy..."
Milton Freedman, the conservative Nobel Prize winner, proved Keynes wrong when Ronald Reagan largely adopted his "supply side" economic model. It was one key to Reagan's success.
We abandoned God, who is the Creator of all, including these ideas. And our Constitution, and our individual rights. This is why we suffer.